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tv   Bloomberg Daybreak Asia  Bloomberg  February 26, 2024 7:00pm-8:00pm EST

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this is daybreak asia, counting down to the major market opens and ahead of trade what is standing out is inflation data. the beat on what economists have been expecting, hotter than what readings had suggested. haidi: how does that fit in with the bank of japan's timing, the rate structure. one driver has been the japan stock rally. annabelle: back to those hike bets and we have seen a lot of economists predicting we could see something as soon s8 role but whether we will see anything away from negative rates, the
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japanese yen is firm against the greenback. equities wise, not much movement in japan is standing out because we don't have much going on elsewhere. still the inflation print and what it means for the boj, whether it makes cities your, we are getting lines from the finance chief in tokyo and he wants to look at the numbers closely. that is the finance minister. not really too much movement. when you look at korea how the shares are performing, the session is looking range bound. we did not get much movement but
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it was weaker here. the economy is back to the forefront's will done numbers are suggesting. scott fed inflation gauge numbers due this week which could highlight of the pass. wait and see and we can check on the trading volume through the hour. haidi: what we're watching in australia in terms of the broader market, downside. a lot of stocks that are slipping are mining and real estate. the drop that we see in the first hour of trading is reflecting caution from the markets after we had shares losing steam. and in terms of data out of the u.s. in the fed's take in terms
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of rates staying higher for longer. aussie dollar is holding steady. we had a decline in the u.s. dollar after weeks of gains and the u.s. exceptionalism story is sticking when it comes to the u.s. dollar. watching crude and seeing pockets of strength across visible markets boosting sentiments. wider sentiment remains range bound. bank of america predicting a tight range. lunar new year demand out of china is a boost. we are seeing buying activity across refineries. it is a big week for the market.
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10 year yields rising in the overnight. we saw the australian equivalent tuesday as well. traders are watching the market taking heavy treasury sales. we had options on monday. let's bring in our next guest who remains positive. head of asian equity research. it's interesting that we see an immediate reaction in terms of wanting to gauge what we see from the cpi reading that came in hotter than expected. the japanese finance minister is speaking in tokyo. how big of a component is this equity rally? >> we like japan and we think
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part of the story is the changing interest rate environment. the soft print took the pressure off the boj but numbers like cpi but the pressure back on. overall, we think we are moving to the end of negative interest rates in japan. just a matter of time and in between then and now it is the spread which is positive for banks in japan, which benefit from the spread. the interest rate environment is changing and we think that is part of the story and japan. haidi: if you look at this chart, lift off might happen in
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march. how much do you think the market has prepped for this? the other big narrative for japan is the governance hopes for japanese companies, right? >> yeah, there's a few levers working in japan as well as corporate earnings growing to new highs. the market has been talking about the end of negative interest rates. it's one of the last things the boj wants to do, so it will happen when it happens. on corporate governance, this has been pretty positive. their publishing a monthly list of stocks that are cooperating with the guidance they issued over one year ago.
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it is interesting that with the second print, two data points does not make a trend. but the names on the list are underperforming this year whereas names on the first list in january outperformed so it is in the background but it comes to company specific surrounds what they're doing to grow earnings. annabelle: we are hearing some investors turning more positive on chinese equities and we've seen it reflected in the performance of shares. even though the rally has taken a breather. are you changing your pessimism toward the market at all? >> we started the year negative
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and we have become a little more negative but from a longer-term perspective it makes sense to pay attention to outliers and china has been an outlier. the market is cheap for a reason. self-inflicted policies took us to where we are now but we only have a little bit of good news to move share prices so we think you will need a concrete resolution to problems in the property market to have a precursor to regain confidence of long-term foreign investment in china. there is a trade going on and that makes sense but for the return of long-term investors, we are not there yet. haidi: india turns out as an
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alternative investment destination instead. >> yes, so not just for us. that is where the market is, the best performing large markets have been the u.s., japan and india. india, market access can be a problem. valuation is not cheap but it's a market we have become interested in. haidi: one of those surprises has been the turnaround in korean stocks. so much of that story seems familiar. do you see opportunities? >> yes, they are trying to replicate what japan has been able to do in terms of becoming the corporate governance market.
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the initial publication is lights on details and there's a lot of strong tech names based in korea. if the target of the program is to eliminate the korean discount, maybe that is a good place to start. if you compare what japan has done with continuous updates, korea is not there. they've got to fill out the program. annabelle: thank you for your time. that was kieran, head of asian equity research at ubp. let's look at movers because we
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are 10 minutes into the session and first it relates to crypto stocks because there was a big story, bitcoin trading above 54,000, a two-year high in something investors are looking at. people are moving into etf's, spurring optimism. what else we are tracking is steel makers, nippon steel, because there's a question whether they will be able to proceed with a planned 14 billion dollar takeover of united states steel corp.. nippon steel and united steelworkers side d.a.. that allows talks to progress to the union meeting came opposition. you're seeing them moving
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higher. woodside, that stock one hour into trading holding in positive territory. profits slid but we had a record output. we want more details in terms of deals because also big focus of talks with santos. haidi is doing a big interview with the woodside ceo about the earnings on the outlook. that's at 11 a.m. in hong kong. haidi: the ceo of a hong kong-based utility will be
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joining us to discuss the outlook for businesses. the white house presses republicans to unlock assistance to ukraine. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today...
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♪ >> some of the top stories this hour, joe biden is hoping negotiators can secure a temporary cease-fire between israel and hamas. in exchange for the release for
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hostages, discussions have increased and a cease-fire could come as soon as monday. jake sullivan said representatives from israel, egypt, the u.s. and qatar signed an agreement on a hostage deal. the palestinian authority's prime minister tendered his resignation. the president asked the government to stay on as caretaker until a new administration forms. the u.s. and arab countries push for reform since the war broke out in october. iran reduced its stockpile of uranium. nuclear inspectors from the un's say their holdings of drop 5% since november but they have the
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technical knowledge and material to build several nuclear weapons in weeks. ukraine says the eu only delivered one third of the ammunition pledged. they told reporters the blockhead delivered half of the rounds as the war crimes into its third year. ukraine is looking for weapons as a u.s. military aid package remains stuck in congress. china wants australia to support efforts to join the trade block. the trade ministers met on the sidelines of a conference. paul allen joins us. how much closer is china to joining the block? >> this meeting between the australian and chinese trade ministers yesterday resulted in
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a request. china asking australia to support the trade block. this would be a shift from australia's current position where it says it does not object. china is courting all the members of the trade block. unanimous support of all countries is needed. china has to address issues that chinese businesses face in the country. it is emblematic of the problems the relationship has. there are strikes against australian exports. there is the issue of the australian academic facing a suspended death sentence in china.
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a few things to resolve before australia would support china's ascension, but there are other issues clouding this. taiwan is interested in joining the block and that would make things more complex. annabelle: there has been a big push for reform, but it is easier said than done, so what is the latest? >> there is a lot of talk and matching deeds is always the challenging part. he heard from the director general. she talked about repairing multilateral truly did. there are always tensions. in india, the commerce minister wants legal certainty around
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subsidies. countries like australia oppose the shielding of subsidies. there are 160 four members of the block. two more got welcomed as well, so finding alignment within the body is difficult. the director general talked about sluggish demand the exception of the u.s. and india in the target for global growth of 3.3%. that was set before the israel hamas war so it might be a little optimistic now. annabelle: paul allen in sydney and u.k. trade minister says the economy will feel the impact of slower growth and turmoil. they spoke at the wto ministerial meeting in abu dhabi. >> it concerns us when growth
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under shoots what we were forecasting. higher growth means greater prosperity. there are reasons we want growth to recover. that is why the u.k. is taking strong action in the red sea with our allies to make sure trade continues to flow in the world does not suffer from events in the middle east. >> you mentioned developing countries should benefit and this conference has been about that. what about the digital goods tariff moratorium? does that get renewed? >> this is essential. going backwards for it not to be renewed, there would be the potential for customs duties on anything from sharing spotify or
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netflix or anything transmitted digitally. we think this would be a retrograde step to go back 20 years or more. it benefits the world and developing countries to not have digital duties. >> some countries might see it as a chip to use if they can bargain. >> our estimates are developing countries, whatever they might gain would be dwarfed by losses to gdp. 20 or 30 times as much loss compared to what they might gain in revenue, so it is against the interests of developing countries and everybody to put
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these duties on something which people expect to flow around the world. >> can you convince everyone? what are the odds that this does not get done? >> we've got 130 or 140 countries that agreed to not put customs duties on e-commerce transactions. that's a good position. the large number of developing countries, some very large countries agree it would not be a good way forward. >> talk about india. while the trade agreement get signed before elections? >> what is important is the deal, not the date. what is important is what will be in the deal and the negotiation is live. there's a huge amount you can do with india.
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so much can be done on a trade agreement. it would not be right to say what is more difficult. we are looking forward to getting something done and thing a lot of time and effort into it and on the indian side as well. haidi: greg hands of speaking with bloomberg. you can get a roundup of the stories to get your day going daybreak. bloomberg subscribers can find it in the terminal. this is bloomberg. ♪
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♪ haidi: taking a look at stories
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we're tracking, u.s. commerce secretary gina raimondo says u.s. companies have requested double the amount of available funds. intel, tsmc and samsung are seeking more than $70 million under the chips act. the indian government is evaluating foreign chipmakers seeking support. israel's semi conductors and a homegrown company are putting forward a plan. the prime minister modi is trying to turn india into a chipmaking hub. annabelle: we had euro stocks futures coming online.
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we cannot say that enough for equities, it is muted. we have seen european stocks with a record high and it is about wait and see. the fed gauge later this week will give us big clues into how fast the fed is likely to shift from its policies. that is the outlook as futures, online. weakness, but still range bound. ♪
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♪ haidi: taking a look at the early part of tuesday, not a lot
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of direction given that we had u.s. stocks stalling short of record highs. ms. ahead scratcher about what the boj does given that we saw jgb futures looking like a downward spiral. but the headline above forecast. we are seeing australian stocks being dragged lower by property and real estate names. the biggest losers in the session so far. kiwi stocks 6/10 of a percent head of the rba decision.
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there was job owning and risk of hikes. we are seeing a loss of 3.7% in the session. one of the stocks we are watching. annabelle: another stock we will be watching is c.o.p. because we had a company reporting its earnings earlier. this is a hong kong-based utility firm. and they reported a sevenfold profit jump in earnings missed analyst estimates. the company saw a turnaround in the value related to energy contracts. joining us now to discuss all of this is the ceo. we get to the energy business in a minute because that is one of your subsidiaries.
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but at headline level it was a miss, so what are the key takeaways? >> we have a solid financial performance because of the dependable business performance. at the same time in our businesses in australia and india, they are doing good. we have excellent performance. our safety performance reduced by 30%. we are accelerating investments in renewable projects and in india investment.
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we published our climate vision in which we will commit to achieving by 2015, but there are interim targets. it's like a step forward. haidi: it is ambitious, but also very costly and competitive. how do you see c.o.p. faring in that environment? >> i agree with you. we talk about energy consideration, we have to take an approach when we set our target.
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in china, the pace of decarbonization is accelerating. there is a huge about of renewable energy. haidi: how much of the budget plan will be spent on the green transition? >> for the money approved, there are a few objectives. one key objective is to help hong kong to develop the economy including supplying housing. we also want to ensure that we
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supply electricity to the customer. last year, we had a black rain storm so we want to make sure we stay resilient and we will continue decarbonization to help the government achieve targets. haidi: can you share about finding a better partner for australia? >> our core strategy is to focus on our core markets including hong kong and china, but we want to maintain a diversified work olio investing in countries including australia and india
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and because of the fact that there is an energy transition, we need capital. we are working with partners, for example in india we successfully introduced canadian investment fund as our partner. it is now 50-50. we are open-minded about the partnership. we are open. the focus at the moment is to turnaround the australian business. in 2020 two the performance was not satisfactory to turnaround the business. annabelle: you mentioned the
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energy makeup. are you considering offshore wind? do you think that will be good value? what is the breakup between different energy types? >> in hong kong we have a clear roadmap. the first phase is to reduce coal and increase gas. so we are almost complete because we have commissioner first energy unit. we also commissioned our offshore target, so this is almost complete. we are preparing for the first phase. the second phase is to import more energy so we can phase out coal generation. and this includes nuclear and
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renewables so you may recall the power station, we invested in brainpower to hong kong. this is the third year anniversary of importing power to hong kong and amounts to 25% of consumption for hong kong. for renewable energy, wind and solar and that could be one of the possibilities. haidi: i'm keen to get you review on valuables for india. will it be imports from china? what is your guidance when it comes to the rates for the market? t.k.: in india, they have aggressive decarbonization
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target and they want to be self sustained, so they are spending a lot of effort in developing the capability within india. this is something we are trying to explore because that will help us reduce our costs and competitiveness in the business. and in those projects, solar projects, we are using locally assembled panels to reduce costs. annabelle: that was tk, ceo. thank you for your time. you can see our interviews on tv and dive into securities or functions that we talk about and become part of the conversation
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during our shows. check it out at tv . ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh j.p. morgan wealth management knows it's easy to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan.
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ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile app. ♪ >> you are watching daybreak asia. treasury yields moving lower but
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pretty much stationary. we are getting lines dropping around the outlook for the fed and the expectations that see a cut. you hearing from the reserve bank of kansas city president and the job market is still strong. another pushback from officials. really not in a rush to cut rates. that's over hearing from another fed official. moving to the big take, the global stock market has been shrinking. we've seen u.s. stocks at a record but a number of companies have gone public.
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in the u.s. the number of companies publicly listed has shrunk. let's bring in our equities reporter. the big question is are corporations taking advantage of the shift? >> we have seen that play out in europe and the u.k.. we've had a number of companies that of opted to sell shares as opposed to debt. it's taken place a few times in new york but it seems like a trend where shares continue to rally. we could see corporations start kicking the tires and take that into consideration for the first time in two decades. haidi: unfortunately my earpiece
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fell out so i could not hear some of that response. the question is what would tempt corporations to list their instead? bailey: you're looking at companies where funding is more difficult, so they are taking advantage to sell stock and companies that have been waiting in the wings to go public and edge toward levels we've seen since 1996. the big question is where our interest rates trading and what does that mean. how risk tolerant are investors? it bodes well that we've seen companies that are not
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profitable going around the world. haidi: we have seen sources of d equities the nation -- equity as they should, is there a reason why this would not take hold? bailey: essential bankers opt to cut interest rates, we've seen the totals impact buyouts and private equity being stuck with companies that they would have thought they would be able to exit while markets have been slow. the only way this won't take place is if we see interest rates come back to the levels in 2020 and 2021 and if there is another source of capital.
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it seems like when i talk to equity capital markets, there is the expectation that we will see a number of ipos and their return to normal that we have not had in the last two years. haidi: bloomberg's equity reporter bailey. terminal subscribers can get more on this piece. u.s. regulators faulted boeing for ineffective procedures and a breakdown in communication between management and staff members. they found a lack of awareness in safety metrics. the report comes after a fuselage blew out in january and the focus has been on safety issues. byd has been contacted by the italian government to bring auto production.
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the need for a second european plant depends on sales volume after stellantis signaled they may move to lower-cost countries. annabelle: fast fashion company sheehan is considering listing in london instead of the u.s.. the firm thinks it is unlikely that u.s. regulators would approve an offering. let's get more from our asia equities reporter. we were discussing with crystal about the performance of chinese companies that have chosen to list in the u.s.. that could be a bigger concern than the regulatory one. what did you find out what has been the performance of chinese companies that have chosen to go public and london? >> for shein, the company is
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trying to get approval from the securities and exchange commission but for them to proceed, there is a debate on whether it would be a chinese company and have to go through this, considering the company has no revenue from china. based overseas in singapore. they proceeded with the u.s. application. it seems likely that u.s. regulators will give them the green light, so what is the next
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route? the second option seems to be politicians in the u.s. in europe and questions about their china presence, their supply chain. haidi: i can understand the u.s. has been the top choice and if they suffer regulatory scrutiny, does it make sense to be based in hong kong or singapore? >> london is the second option. seems they are trying to keep their distance from china.
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the third option would be singapore. it makes sense because it is where it is headquartered and the regulators are over there. haidi: bloomberg's asia reporter there with the latest on what we could see when it comes to the shein ipo. more ahead, this is bloomberg. ♪
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♪ annabelle: taking a look at crypto prices and movements are aligned with the market trend which is range bound. investors are underpinning the pricing we are seeing. it is always the jostling that a track or dominance of where will be the next crypto of. hong kong is on a mission in the
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asian region but they are planning to force crypto providers to collect records, something that could dent a key part of the industry. let's bring in our asia finance reporter. it is curious because we have seen hong kong trying to ramp up enthusiasm, but you hear that they want curbs, so what is the signal? suvashree: it is confusing from the outside, but the signal is a plan. last year hong kong securities commission had a regulation in to regulate platforms and that
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did not include over-the-counter platforms and 64 billion dollars in crypto, the majority came from overseas markets. that led to concerns that this kind of money laundering is coming out from the platforms that are not regulated. hong kong tried to plug the loophole and it is a strong signal that hong kong is trying to give to the world's that they are opening up for crib though but no hanky-panky or money
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laundering that we typically see in crypto. haidi: asia finance reporter with the latest on bitcoin. this is futures. when it comes to the u.s. session, really slumping. close to record highs. u.s. futures looking softer. chinese equities losing momentum after we saw a hopeful rebound from the five year lows. we could see investors taking a breather in terms of metal some government policies. this is bloomberg. ♪
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